September 19, 2023
* currencies & metals bump higher on Monday
* Chuck is all alone once again…
Good Day… And a Tom Terrific Tuesday to you! What a wonderful surprise last night, as Cardinals Pitcher, Adam Wainwright, was the winning pitcher for the 200th time… I was dead wrong a couple of weeks ago, when I said that Adam should hang them up, as that was after he couldn’t get out the 2nd inning against the Royals… The Royals, for cryin’ out loud! But he rallied, and won his last two starts to get to 200… It was a beautiful day here yesterday, and the night at the ballpark was probably just wonderful! I won’t be writing tomorrow, folks, my oncologist called yesterday and asked me to change my appt to tomorrow morning… bright and early… So, I agreed, because she wouldn’t ask me to change it, if she didn’t see a reason to see me… And once again, I’m all alone for the next 11 days… All by myself… Hello? Pizza Man Pizza? The Band, Lighthouse, greets me this morning with their song: One Fine Morning…
Well, yesterday’s price action in the dollar and the currencies didn’t move much… The BBDXY lost about 1 index point to 1,252, but the show of the currencies didn’t produce any real winner, winner, Chicken dinners… Gold was able to gain $9.40 on the day to end the day at $1,934.50, and Silver gained 18-cents to end the day at $23.32… Some real “Mr. Obvious” wrote on Kitco.com yesterday, that Gold will benefit from a weakening dollar”… Really? I wonder what gave him that clue? Yes, a weaker dollar would push more people into Gold as a safe haven, but everyone and their brothers knows that, and we didn’t need to be reminded of it!
The price of Oil bumped higher by another buck yesterday, and ended the day trading with a $92 handle. Do you believe that investors have finally seen what I’ve been talking about for months now, that the supply would diminish as the summer wore on, and the price would rise? I found this on Bloomberg.com this morning: “The gains in recent sessions have been accompanied by a jump in key time spreads that suggest the market is undersupplied, while bullish call options are also getting more expensive.”
The 10-year’s yield dropped to 4.31% yesterday, don’t ask me why, for I have no idea, other than there could be some holdouts to the thought that the Fed/ Cabal/ Cartel would pivot at their meeting tomorrow… I would have thought that we had weeded out all those wayward thinkers, but apparently not…
In the overnight markets last night: Well, there was more drifting in the dollar, but when the dust settled, the BBDXY lost 1 index point and starts today at 1,251… Gold is up a buck in the early trading today, while Silver is up 4-cents to start the day… I doubt there will be much movement from any asset today, and tomorrow, ahead of the FOMC meeting… The price of Oil held on to its $92 handle… Brent Crude traded over $95 this morning, and it seems to be leading the way for the West Texas Intermediate (WTI)… The 10-year Treasury holds a 4.31% yield this morning, after a night of drifting in this asset too…
Let’s not forget that after tomorrow’s trip to fantasy land, when the FOMC Meets, that on Thursday, the U.K. and Swiss National Bank, meet to discuss rates… Last week the European Central Bank (ECB ) hiked rates, and made statements that the rate hikes would keep coming should inflation continue to weigh on the economies of the European Union… Well, at first glance, Eurozone inflation eased a bit last month in a report that printed last night… I hope the ECBers don’t get a big head and think that they have defeated inflation… As we’ve seen in the U.S., inflation seems to remain and come back even stronger, just when you thought you had it on the run…
I saw yesterday, that the famous author, publisher, and person, Bill Bonner wrote about that article on MarketWatch.com that had me seething over the weekend… He pointed out the same thing I pointed out that the writer’s premise was all wrong… And that he used stale old data that was useful for his argument, instead of using fresh data that would have put his argument to shame… Here’s s a snippet of Bill from his letter yesterday: “ We read quickly, not wanting to waste time, but curious; the financial press is more likely to peddle misconceptions than to dispose of them. Sure enough, the article is a pot-Poruri of error: the debt is not too high…it doesn’t need to be paid off… it’s not bad for the economy…there’s no crisis coming…and everybody does it.” – Bill Bonner
And then I thought of the Gov’t putting the writer up to this bit of misconception… For if the writer can get one person out there to believe this gunk, then that one person can tell others, and so on… So, my warning to all is to not accept this gobbledygook as the truth…
This data in from the Fed St. Louis, and doesn’t spell a pretty picture for U.S. consumers… Let’s get into this: “U.S. consumers ran up their credit card debt past the $1 trillion mark for the first-time last month, according to a report on household debt from the Federal Reserve Bank of New York.
Total household debt, which includes home and auto loans, has eclipsed $17 trillion.
The Federal Reserve Bank of St. Louis reports that credit card delinquencies, which are still low compared to periods such as the Great Financial Crisis, are on the rise.”
Chuck again… And delinquencies are on the rise… Uh-Oh!
There was a blip on MarketWatch.com yesterday, that said, that with no additional spending, the U.S. debt will add $5 Billion per day for the next ten years! That equals a 1.825 Trillion in annual debt being added each year… And I think that number is a little light… I think that when all the beans are counted the annual debt will rise by $2 Trillion each year, just based no the rise in cost to service the debt, that will continue to grow, and require financing at much higher interest rates…
And to illustrate what I’m saying… And a quick trip to the debt clock tells me that the U.S. has now gone past $33 Trillion, rising over $1 Trillion in just 3 months! Just think, if that continued to be the bill of fare every 3 months, the annual debt would be $4 Trillion! OK, I don’t think it will come to that, but still, once the money is spent, there’s not calling it back, and once you get to $1 Trillion every 3 months, it won’t be that big of a deal to do it again… At least it won’t be a big deal to the “magic Money Tree” people…
I had to clean off my writing desk yesterday, this was a monumental challenge for me, but I got it done! My desk had gotten ruined in the flood… UGH! In doing this I came across a cartoon that reminded me of my call in life, which is to get investors to diversify their investment portfolios, using metals and currencies… The cartoon shows a hen with tip cup sitting next to her, and she sits there with a sign that says: “All my eggs where in one basket”
There will come a time, once again, where the dollar will be getting sold daily, and at that time you will wish you had bought some currencies when they were cheap to offset the dollar’s losses… I don’t know when this will occur, I just know that in the history of the fiat dollar (since 1971), there have been strong dollar trends, followed by weak dollar trends, followed by strong dollar trends, followed by weak dollar trends, and then finally the strong dollar trend that we have been experiencing for more than 10 years now… The previous trends could last 10 to 17 years… So, we’re in the area of historic trends, that it could go either way… I wouldn’t be betting that it could last another 6 years, that’s for sure!
The U.S. data Cupboard today, still is lacking at best, with only some housing data on the docket… So, once again, the markets wait on Wednesday’s FOMC meeting… I think the markets are all on board with the thought that the Fed will pause this month, but sound very hawkish in doing so… You know where I stand with what the FOMC should do, so I’m in difference with the Fed Heads… What else is new?
To recap… The dollar drifted throughout Monday’s U.S. session, and ended up losing 1 index point in the BBDXY. The currencies couldn’t really get fully on the rally tracks, but Gold gained $9 and Silver gained 18-cents, Chuck pointed out that even Bill Bonner thought the article on MarketWatch.com this past weekend was a waste of time! Credit Card delinquencies are rising, which wouldn’t be a big deal if the total credit card debt was insignificant, but it reached $1 Trillion last month! The price of Oil bumped higher again by a buck, seems to be a daily occurrence now, eh?
For What it’s Worth… the proverbial well was dry this morning, with regards to FWIW worthy articles… But I did find this on wall street on parade, it’s an old repeat article by them, about the banking crisis, and who should have known this was coming down the pike, and it can be found here: Evidence Suggests U.S. Financial Crisis Started on August 14, 2019 (wallstreetonparade.com)
Or, here’s your snippet: “n the Federal Reserve’s most recent “Supervision and Regulation Report” on the big bank holding companies it “supervises,” the Fed continued its attempts to perpetuate the narrative that “The banking industry came into 2020 in a healthy financial position” and has simply unraveled as a result of the COVID-19 pandemic. That narrative is built on the same flimsy house of cards that the New York Times and Andrew Ross-Sorkin built the narrative that the mega banks on Wall Street were not responsible for the 2008 financial collapse.
The Fed is desperate to promote this narrative to stop a new Congress next year from holding hearings on why the Fed, for the second time in 12 years, had to engage in trillions of dollars in Wall Street bank bailouts after reassuring Congress for years that the financial system was fine as the Fed loosened or rolled back reforms like the Volcker Rule. The Fed needs this narrative to prevail in order to cover up its own negligent supervision of the behemoth banks.
Depending on the composition of Congress next year, those hearings might bring about not only a restoration of the Glass-Steagall Act (which bans trading houses on Wall Street from combining with federally-insured, deposit-taking banks) but might also put an end to the Fed’s ability to negligently supervise the big banks with one hand, while bailing them out with the other hand, using money it creates out of thin air. (The Fed will report its latest balance sheet tally today at 4:30. It is expected to be close to $7 trillion from the $6.7 trillion it reported last week – which is $2.8 trillion more than it was exactly one year ago. The growth in the Fed’s balance sheet has come as a result of efforts to prop up Wall Street banks.)
The Fed knew, or should have known (since it has hundreds of people monitoring the markets at the New York Fed) that there was a big banking crisis brewing in August of last year.”
Chuck again… this article goes on to give you the timeline of things that should have given someone with an ounce of gray matter a clue that there was a problem brewing, and if you have the time, it would be good if clicked the link above and read the truth… not the gobbledegook the media tries to lay off on you!
Market Prices 9/19/2023: American Style: A$ .6459, kiwi .5941, C$ .7440, euro 1.0703, sterling 1.2395, Swiss $1.1160, European Style: rand 18.9366, krone 10.7445, SEK 11.1044, forint 358.18, zloty 4.3467, koruna 22.8205, RUB 96.15, yen 147.62, sing 1.3629, HKD 7.8180, INR 83.27, China 7.2905, peso 17.08, BRL 4.8542, BBDXY 1,251.58, Dollar Index 104.92, Oil $92.66, 10-year 4.31%, Silver $23.36, Platinum $942.00, Palladium $1,249.00, Copper $3.75, and Gold… $1,935.69
That’s it for today… Don’t forget that I’ll not be writing tomorrow… See you again on our Tub Thumpin’ Thursday! I think I’m going to be getting my new Chemo after new bloodwork, that shows that I’m good to go… I did’t take down all my pictures on the drawing board that is part of my writing desk… There are a lot of good memories there, espcially the one that I look at directily every time I sit down… It’s of me and my oldest sister, Brenda… We lost Brenda at an early age of 39 with cancer… Another fave of mine is of my dad, my brother David, and me sitting on our old dilapidated back porch, when I was probably 10 years old… OK.. enough of that… The Cure takes us to the finish line today with their song: Just Like Heaven… I hope you have a Tom Terrific Tuesday today, and please remember to Be Good To Yourself!
Chuck Butler